How it works
You can use credit cards to buy goods and services in New Zealand, overseas and online. Each time you use your credit card to buy something, you borrow money from the card issuer.
If you pay off your credit card bill in full each month, you will not be charged interest on the money you have borrowed (unless you have withdrawn cash off your card). If you only pay some of it off, the balance will be carried over to the next month and you will be charged interest on the money owing. The interest will be added to the amount you owe. Credit cards usually have high interest rates.
If you don't pay your credit card off in full each month, the interest you pay can mean you end up paying far more for items you buy.
Understand the true cost
Banks and credit companies must have a minimum repayment warning on monthly credit card statements to emphasise the high costs if you only make the minimum repayments each month.
Not all shops accept credit cards, and some stores charge a credit card administration fee. You are also likely to pay a currency conversion charge if you use your credit card overseas or on foreign websites.
Many credit cards now use contactless card technology such as Visa payWave and MasterCardPayPass, which let you pay simply by holding your card next to the payment machine (rather than swiping or inserting the card).
Some credit cards earn reward points when you spend on your card.
Most banks offer Visa Debit or Debit MasterCard. These cards are linked to your bank account like EFTPOS cards so you spend using your own money, but you can use them like credit cards to buy online or pay at contactless terminals.
Use credit cards online
Consider paying by credit card. If the product doesn’t arrive, ask your bank for a chargeback. You may be able to get your money back.